In Late May, Shared Value Project Chair, Rhod Ellis-Jones, flew to London to meet with Marc Pfitzer, Managing Director FSG Group Europe. Marc has been a key contributor to the evolution of shared value thinking at FSG since its early days and frequently releases papers on its application – more on Marc here. FSG (Foundation Strategy Group) was established by Mark Kramer, co-author of the Creating Shared Value paper published in the Harvard Business Review in 2011. Its specific practice areas are social impact, collective impact, creating shared value, education and youth, global health and strategic evaluation.
Across the table at Paddington’s Frontline Club, a home for journalists on respite from reporting at the frontline, Rhod discussed the directions the Shared Value Project is taking. Here are some of the topics explored in that meeting.
The origins of the shared value concept
Early in the new millennium, Marc left Boston Consulting to join Mark Kramer and Michael Porter in the development of FSG as a non-profit consulting practice and knowledge centre for advising funders, nonprofit organizations and private sector businesses. The global leader in competition theory, Porter could see the competitive advantage inherent in a businesses considering social impact: not only the reputational advantages, but the ability to improve efficiency, productivity and other operational outcomes. Shared value as a concept began to take shape with the release of the influential (but not actually the first) paper in January/February 2011.
Shared value through shared knowledge
To a certain degree, FSG treats shared value the way web developers treat open source software. The company is open to collaboration, via the sharing of knowledge and experience, with any organisation genuinely intent on long term social impact. To this end FSG will launch an online space soon which will host case studies and interaction between people and organisations working in the shared value space. Marc highlighted great work being done in Helsinki and Czech Republic. All of which we hope to learn from once the new online space is live.
A focus on business competition
Shared value is a concept with many dimensions. The FSG model is focused on business competition – how an edge can be gained by engaging communities, changing business systems, and educating customers and investors. Business is seen as the key to broader application of shared value/social principles in other sectors (government and community). The underlying principle being that businesses will not invest in shared value thinking and socially orientated programs if there is no competitive edge to be gained. Ultimately it’s about medium to long term business growth and delivery of increasing returns to shareholders from business activities that have a positive social impact. That’s the thrust of the company’s recent video.
The problem solving approach
We talked through the Australian experience thus far and the different applications of the shared value concept. The Shared Value Project is exploring the concept in three main directions:
- Shared value as a framework for facilitating the development of cross-sector partnerships (between government, community and business).
- Shared value as competitive advantage – as per FSG’s main model.
- Shared value as a framework for solving business problems – finding economic problems linked to social problems and developing models to release/create value.
Marc was intrigued by the latter and reinforced the point that companies need to commit to problem solving as a strategy to improve business outcomes. I explained that we have adopted the view that shared value is a model all sectors can embrace for different outcomes but often shared value. For example, the facilitation we have done around older worker participation clarified that companies, governments and community organisations are all aiming to create very similar value, although it may be termed differently. Prioritisation may differ but ultimately all sectors need to gain for a problem to be solved. That’s why the Project is working to bring progressive leaders of non-government organisations to the table, and help them recast their relationships with funding and delivery partners.
FSG has no immediate growth ambitions beyond its current 100-strong workforce. Effective collaboration will be important in establishing shared value as a business philosophy. The Project is considering a few near term opportunities on Australian soil for sharing knowledge in leadership and practitioner forums, and via innovation competitions.
Image credit: Frontline Club London